1Amending the act of July 9, 2008 (1st Sp.Sess., P.L.1873, No.1), 
2entitled "An act providing for alternative sources of energy; 
3establishing the Alternative Energy Development Program, the 
4Consumer Energy Program, the Home Energy Efficiency Loan 
5Program, the Home Energy Efficiency Loan Fund and the 
6Alternative Energy Production Tax Credit Program; and 
7providing for the powers and duties of the Department of 
8Environmental Protection," repealing provisions relating to 
9the Alternative Energy Production Tax Credit Program.

10The General Assembly of the Commonwealth of Pennsylvania
11hereby enacts as follows:

12Section 1. Chapter 7 of the act of July 9, 2008 (1st
13Sp.Sess., P.L.1873, No.1), known as the Alternative Energy
14Investment Act, is repealed:

15[CHAPTER 7

16Section 701. Establishment.

17There is established the Alternative Energy Production Tax
18Credit Program.

19Section 702. Definitions.

20The following words and phrases when used in this chapter
21shall have the meanings given to them in this section unless the

1context clearly indicates otherwise:

2"Alternative energy production tax credit." The credit
3provided for under this chapter.

4"Pass-through entity." A partnership as defined under
5section 301(n.0) of the Tax Reform Code of 1971, or a
6Pennsylvania S corporation as defined under section 301(n.1) of
7the Tax Reform Code of 1971.

8"Qualified tax liability." The liability for taxes imposed
9under Article III, IV or VI of the Tax Reform Code of 1971. The
10term does not include any tax withheld by an employer from an
11employee under Article III of the Tax Reform Code of 1971.

12"Taxpayer." An entity subject to tax under Article III, IV
13or VI of the Tax Reform Code of 1971.

14Section 703. Eligible applicants.

15(a) General rule.--A taxpayer who develops or constructs an
16alternative energy production project located in this
17Commonwealth with a useful life of at least four years may apply
18for an alternative energy production tax credit as provided
19under this chapter. By September 15, 2009, a taxpayer must
20submit an application to the department on a form prescribed by
21the department, setting forth the amount of the investment in an
22alternative energy production project that was made in the
23taxable year that ended in the prior calendar year.

24(b) Application.--An application shall be developed by the
25department and shall include:

26(1) Type and location of the alternative energy
27production project.

28(2) Total cost of the alternative energy production
29project.

30(3) Any other information deemed appropriate by the

1department.

2Section 704. Award of tax credits.

3(a) Qualification.--A taxpayer that is eligible under
4section 703 shall receive an alternative energy production tax
5credit for the taxable year in an amount equal to 15% of the
6total amount of all development, equipment and construction
7costs paid for alternative energy production projects, not to
8exceed $1,000,000 for each taxpayer, in the taxable year to be
9applied against the taxpayer's qualified tax liability.

10(b) Calculation.--In calculating the total amount of all
11development, equipment and construction costs paid for
12alternative energy production projects, the taxpayer shall
13deduct the amount of any grant or other subsidy received in
14relation to the alternative energy production project for which
15the credit is sought by the taxpayer from a Federal, State or
16local government entity, including an authority.

17(c) Notification of applicant.--The department shall, within
1890 days of receipt, review each application and notify the
19applicant whether or not the applicant is approved for a tax
20credit.

21(d) Notification of Department of Revenue.--Upon
22determination by the department that an approved applicant has
23incurred costs for an alternative energy production project, the
24Department of Revenue shall issue to an applicant a tax
25certificate that sets forth the amount of alternative energy
26production tax credit approved for the eligible applicant.

27Section 705. Carryover, refund, assignment and carryback of
28credit.

29(a) Carryover.--If the taxpayer cannot use the entire amount
30of the alternative energy production tax credit for the taxable

1year in which the alternative energy production tax credit is
2first approved, the excess may be carried over to succeeding
3taxable years and used as a credit against the qualified tax
4liability of the taxpayer for those taxable years. Each time
5that the alternative energy production tax credit is carried
6over to a succeeding taxable year, it is to be reduced by the
7amount that was used as a credit during the immediately
8preceding taxable year. The alternative energy production tax
9credit provided under this chapter may be carried over and
10applied to succeeding taxable years for no more than five
11taxable years following the first taxable year for which the
12taxpayer was entitled to claim the credit.

13(b) Application.--An alternative energy production tax
14credit approved by the department in a taxable year first shall
15be applied against the taxpayer's qualified tax liability for
16the current taxable year as of the date on which the credit was
17approved before the alternative energy production tax credit is
18applied against any tax liability under subsection (a).

19(c) Carryback and refund.--A taxpayer is not entitled to
20carry back or obtain a refund of an unused alternative energy
21production tax credit.

22(d) Sale or assignment.--

23(1) A taxpayer, upon application to and approval by the
24department, may sell or assign, in whole or in part, an
25alternative energy production project tax credit granted to
26the taxpayer under this chapter if no claim for allowance of
27the credit is filed within one year from the date the credit
28is approved by the department and the Department of Revenue
29under this act. The department, in consultation with the
30Department of Revenue, shall establish guidelines for the

1approval of applications under this subsection.

2(2) Before an application is approved, the Department of
3Revenue must make a finding that the applicant has filed all
4required State tax reports and returns for all applicable
5taxable years and paid any balance of State tax due.

6(3) Notwithstanding any other provision of law, the
7Department of Revenue shall assess the tax of an applicant
8under this subsection within 120 days of the filing of all
9required final returns or reports in accordance with section
10806.1(a)(5) of the act of April 9, 1929 (P.L.343, No.176),
11known as The Fiscal Code.

12(e) Purchasers and assignees.--The purchaser or assignee of
13all or a portion of a tax credit under subsection (d) shall
14immediately claim the credit in the taxable year in which the
15purchase or assignment is made. The amount of the tax credit
16that a purchaser or assignee may use against any one qualified
17tax liability may not exceed 50% of such qualified tax liability
18for the taxable year. The purchaser or assignee may not carry
19forward, carry back or obtain a refund of or sell or assign the
20tax credit.

21Section 706. Limitation on tax credits.

22(a) Total.--The total amount of credits approved by the
23department shall not exceed:

24(1) $5,000,000 in fiscal years 2008-2009 through 2011-
252012.

26(2) $8,000,000 in fiscal year 2012-2013.

27(3) $10,000,000 in fiscal years 2013-2014 through 2014-
282015.

29(4) $2,000,000 in fiscal year 2015-2016.

30(b) Formula.--If the total amount of alternative energy

1production tax credits approved for all taxpayers exceeds the
2amount allocated for those credits, then the alternative energy
3production tax credit to be received by each applicant shall be
4the product of the allocated amount multiplied by the quotient
5of the alternative energy production tax credit approved for the
6applicant divided by the total of all alternative energy
7production tax credits approved for all applicants, the
8algebraic equivalent of which is:

9taxpayer's alternative energy production tax credit =
10amount allocated for those credits x (alternative energy
11production tax credit approved for the applicant/total of
12all alternative energy production tax credits approved
13for all applicants).

14Section 707. Pass-through entity.

15(a) General rule.--If a pass-through entity has any unused
16tax credit under section 705, the entity may elect, in writing,
17according to the department's procedures, to transfer all or a
18portion of the credit to shareholders, members or partners in
19proportion to the share of the entity's distributive income to
20which the shareholder, member or partner is entitled.

21(b) Additional credit and limitation.--The credit provided
22under subsection (a) is in addition to any alternative energy
23production tax credit to which a shareholder, member or partner
24of a pass-through entity is otherwise entitled under this
25chapter. A pass-through entity and a shareholder, member or
26partner of a pass-through entity may not claim a credit under
27this chapter for the same alternative energy production
28investment.

29(c) Application.--A shareholder, member or partner of a
30pass-through entity to whom credit is transferred under

1subsection (a) must immediately claim the credit in the taxable
2year in which the transfer is made. The shareholder, member or
3partner may not carry forward, carry back, obtain a refund of or
4sell or assign the credit.

5Section 708. Reporting.

6(a) General rule.--No later than September 1 of each year,
7the department, in consultation with the Department of Revenue,
8shall submit a report to the General Assembly summarizing the
9effectiveness of the tax credit provided under this chapter. The
10report shall include the name of each taxpayer utilizing the
11credit as of the date of the report and the amount of credits
12approved for or utilized by each taxpayer. The report may also
13include recommendation for changes in the calculation or
14administration of the tax credit. The report shall be submitted
15to the chairman and minority chairman of the Appropriations
16Committee of the Senate, the chairman and minority chairman of
17the Finance Committee of the Senate, the chairman and minority
18chairman of the Appropriations Committee of the House of
19Representatives and the chairman and minority chairman of the
20Finance Committee of the House of Representatives. The report
21shall include the following information, which shall be
22separated by geographic location within this Commonwealth:

23(1) The amount of credits claimed during the fiscal
24year.

25(2) The number of alternative energy production projects
26receiving a tax credit and the dollar amount of tax credits
27granted under this chapter in the aggregate and by project.

28(3) The types, locations and costs of projects.

29(4) The total amount spent in this Commonwealth during
30the fiscal year by each alternative energy production

1project.

2(5) The estimated benefits of the projects in creating
3alternative energy.

4(6) The total amount of tax revenues generated in this
5Commonwealth from alternative energy production projects.

6(7) The total number of jobs created during the fiscal
7year by alternative energy production projects.

8(b) Public information.--Notwithstanding any law providing
9for confidentiality of tax records, the following shall be
10public information:

11(1) Information in the report under subsection (a) which
12shall be posted on the Internet websites of the Department of
13Revenue and the department.

14(2) The identity of each taxpayer utilizing a tax credit
15under this chapter and the amount of credits approved and
16utilized by each taxpayer which shall be made available
17annually, beginning no later than one year after the credits
18were granted.

19Section 709. Termination.

20The department shall not approve an alternative energy
21production tax credit under this chapter for taxable years
22ending after December 31, 2016.

23Section 710. Regulations.

24The department, in cooperation with the Department of
25Revenue, shall promulgate regulations necessary for the
26implementation and administration of this chapter.

27Section 711. Applicability of chapter.

28This chapter shall apply as follows:

29(1) Except as provided in paragraph (2), this chapter
30shall apply to taxable years beginning after December 31,

12007.

2(2) The tax credit under this chapter shall apply to
3alternative energy production projects commencing on or
4after the effective date of this section.]

5Section 2. This act shall take effect immediately.